August's Featured Speaker: David Turk, Indiana Market & Catering
David was recently a speaker at the International Restaurant & Foodservice Show of New York.
The Five F's or How to Craft a Strategy for Long-Term Financial Prosperity
Understanding the 5 F’s is the key to determining your price and profit structure.
In order to come up with the “right price” to charge your client, it is crucial for off-premise caterers to understand the value for themselves of taking on a party in the first place.
This is what I call the 5 F’s: important considerations when coming up with your price.
Yes, we realize that the party guests will likely have a wonderful time; but what about us? Will this be a joyful experience for the caterer? Or misery from the very first phone call to the final clean up? This is an often overlooked component when trying to figure out whether a party is “worth it” for us………..or not.
To what extent will we be proud of being able to say we served this particular client? If you had the opportunity to serve the President AND the Pope at the same party, how might that impact your pricing? Is there a price tag that you can place on your ability to mention the client’s name in your promotional materials?
3. Future Business
Is this party going to be a one-off after which you will never hear from the client again? Or is there repeat business to be had? Take into account the lifetime value of a client when pricing your product.
4. Fill the date
Are you anticipating that you will have a slow day in August that is begging for business? Or expecting a crazy, super-insane night in the middle of December for which demand is huge? Take your need to fill the date into consideration when giving a quote. The greater the demand, the higher the price.
After everything else is taken into account, what amount of profit would make it worth your while to take on this party? That is, what is the right price to charge?
So, in summary, the first four F’s are just the starting point, and then….
- Take your client's budget into consideration
- Have a sense of what the competition is charging and what the market will bear (“a sense" is the important part; don't allow this factor to completely drive you)
- Understand your client’s expectations are their emotional connection to the party.
- Charge what you can, using ethically sound selling strategies (primarily by engendering long term, confidence-creating relationships).
Now, go out there and take care of the most important asset your business has…………..YOU!
More about David Turk:
David Turk is the founder and president of Indiana Market & Catering, a full-service caterer in New York City. Over the past 30 years, David’s leadership has made Indiana one of New York City’s top caterers. Named Best Value/Dinner Caterer in New York Magazine and one of the highest rated caterers in the Zagat’s Marketplace Guide NYC and known for its innovative American cooking, high standards and excellent service, Indiana has been responsible for organizing thousands of events throughout New York City. In addition, David has consulted, written and lectured around the country on the art of customer service and the business of catering. His hosts have included the American Institute of Wine and Food, NYU, Society for Women in Foodservice, New York Restaurant Association, James Beard House, The New School, The New York Restaurant School, Catersource, ISES, Institute of Culinary Education, Learning Annex, The Special Event, and The Fancy Food Show. His articles have appeared in Catering Magazine and Catersource.